Finance News: School sets up trust bank to 'fight global poverty'

A school in Oxford is to establish a microfinance trust bank offering loans to people in developing countries.

Pupils at St Edward's School in the city are working to raise the £5,000 needed to set up the first trust bank in Indonesia, and there are already plans to create follow-up loan funds in Ghana and Peru.

The venture, the first of its kind for a school in the UK, has been developed in partnership with the Oxford-based entrepreneurial charity Opportunity International UK.

It follows a Downing Street proposal that would encourage schools to become grant-makers. But St Edward's is a fee-paying school, not in the state sector.

Andrew Trotman, the school warden, said: "The students feel strongly that they want to provide long-term, continuous help to people in poorer countries. Microfinance is a new initiative for schools in the UK and we're determined to be at the forefront of changing the way schools donate to charity to help alleviate world poverty."

The trust bank initiative works by bringing together between 10 and 30 poor entrepreneurs to guarantee the repayment of each other's loans. The average loan size is less than £150, and about 98 per cent of loans are repaid.

David Coates, the chief executive of Opportunity International UK, said: "St Edward's is the first school to join the trust bank initiative and be part of a working solution in the fight against global poverty. I respect its commitment to providing long-term aid."

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